EMGT 810

Illustrative Algebraic Formulations – Basic Linear Programming

Models for Eight Representative Decision Situations

1. The Westchester Chamber of Commerce periodically sponsors public service seminars and
programs. Currently, promotional plans are under way for this year’s program. Advertising
alternatives include television, radio, and newspaper. Audience estimates, costs and maximum
media usage limitations are as shown.

Constraint Television Radio Newspaper

Audience per advertisement 100,000 18,000 40,000
Cost per advertisement $2,000 $300 $600
Maximum media usage 10 20 10

To ensure a balanced use of advertising media, radio advertisements must no exceed 50% of the
total number of advertisements authorized. In addition, television should account for at least 10%
of the total number of advertisements authorized.

a. If the promotional budget is limited to $18,200, how many commercial messages should be run
on each medium to maximize total audience contact?

ALGEBRAIC FORMULATION
Let: x1  number of television spot advertisements
x2  number of radio advertisements
x3  number of newspaper advertisements

O.F.:
Max 100,000 x1 + 18,000 x2 + 40,000 x3 (audience contact)

S.T.: 2,000 x1 + 300 x2 + 600 x3  18,200 (Budget)

x1  10 (Max TV)
x2  20 (Max Radio)
x3  10 (Max News)
x2  0.5(x1 + x2 + x3 ) (Max 50% Radio)
(or -0.5 x1 + 0.5 x2 – 0.5 x3  0 )
x1  0.1(x1 + x2 + x3 ) (Min 10% TV)
(or 0.9 x1 - 0.1 x2 – 0.1 x3  0 )
x1 , x2 , x3 0 (non-negativity)
2. The management of Hartman Company is trying to determine the amount of each of two products
to produce over the coming planning period. The following information concerns labor
availability, labor utilization, and product profitability.

Department Product (hours/unit) Labor Hours Available

1 2
A 1.00 0.35 100
B 0.30 0.20 36
C 0.20 0.50 50

Profit contribution/unit $30.00 $15.00

Develop a linear programming model of the Hartman Company problem. Solve the model to
determine the optimal production quantities of products 1 and 2.

ALGEBRAIC FORMULATION

Let: x1  units of product 1 produced

x2  units of product 2 produced

O.F.:
Max 30 x1 + 15 x2 (profit)

S.T.: x1 + 0.35 x2  100 (Dept. A hours limit)

0.30 x1 + 0.20 x2  36 (Dept. B “ “)
0.20 x1 + 0.50 x2  50 (Dept. C “ “)
x1 , x2  0 (non-negativity)

SOLUTION:
x1 =77.89, x2 = 63.16, Profit = 3284.21
3. The employee credit union at State University is planning the allocation of funds for the
coming year. The credit union makes four types of loans to its members. In addition, the credit
union invests in risk-free securities to stabilize income. The various revenue producing
investments together with annual rates of return are as follows:

Type of Loan/Investment Annual Rate of Return (%)

Automobile loans 8
Furniture loans 10
Other secured loans 11
Signature loans 12
Risk-free securities 9

The credit union will have $2,000,000 available for investment during the coming year. State laws
and credit union policies impose the following restrictions on the composition of the loans and
investments.
 Risk-free securities may not exceed 30% of the total funds available for investment.
 Signature loans may not exceed 10% of the funds invested in all loans (automobile,
furniture, other secured, and signature loans.)
 Furniture loans plus other secured loans may not exceed the automobile loans.
 Other secured loans plus signature loans may not exceed the funds invested in risk-free
securities.
How should the $2,000,000 be allocated to each of the loan/investment alternatives to maximize
total annual return?

ALGEBRAIC FORMULATION
Let: x1  $ automobile loans
x2  $ furniture loans
x3  $ other secured loans
x4  $ signature loans
x5  $ “risk free” securities

O.F.:
Max 0.08 x1 + 0.10 x2 + 0.11 x3+ 0.12 x4+ 0.09 x5 (total return)

S.T.: x5  600,000 (30% limit)

x4  0.10 (x1 + x2 + x3 + x4) (10% of all loans limit)
(or –0.10 x1 –0.10 x2 –0.10 x3 + 0.90 x4  0)
x2 + x3  x1 (furniture + other  auto)
(or – x1 + x2 + x3  0)
x3 + x4  x5 (other + signature  risk free)
(or x3 + x4 – x5  0)
x1 + x 2 + x 3 + x 4 + x 5  2,000,000 (available funds)
x1 , x2, x3, x4, x5  0 (non-negativity)
4. Hilltop Coffee manufactures a coffee product by blending three types of coffee beans. The cost
per pound and the available pounds of each bean are as follows:

Bean Cost per Pound Available Pounds

1 $0.50 500
2 $0.70 600
3 $0.45 400

Consumer tests with coffee products were used to provide ratings on a scale of 0-100, with higher
ratings indicating higher quality. Product quality standards for the blended coffee require a
consumer rating for aroma to be at least 75 and a consumer rating for taste to be at least 80. The
individual ratings of the aroma and taste for coffee made from 100% of each bean are as follows:

Bean Aroma Rating Taste Rating

1 75 86
2 85 88
3 60 75

Assume that the aroma and taste attributes of the coffee blend will be a weighted average of the
attributes of the beans used in the blend.

What is the minimum cost blend that will meet the quality standards and provide 1000 pounds of
the blended coffee product?

ALGEBRAIC FORMULATION
Let: x1  pounds of bean 1
x2  pounds of bean 2
x3  pounds of bean 3

O.F.:
Min 0.50 x1 + 0.70 x2 + 0.45 x3 (cost)

S.T.:
75 x1 + 85 x2 + 60 x3  75 (aroma rating min.)
x1 + x2 + x3

(or 10 x2 –15 x3  0)

86 x1 + 88 x2 + 75 x3  80 (taste rating min.)

x1 + x2 + x3

(or 6 x1 +8 x2 +5 x3  0)

x1  500 (available #’s bean 1)

x2  500 (“ “ 2)
x3  400 (“ “ 3)
x1 + x2 + x3 = 1000 (nec. production)
x1 , x2, x3  0 (non-negativity)
5. Ajax Fuels, Inc., is developing a new additive for airplane fuels. The additive is a mixture of
three ingredients: A, B, and C. For proper performance, the total amount of additive (amount of A
+ amount of B + amount of C ) must be at least 10 ounces per gallon of fuel. However, because of
safety reasons, the amount of additive must not exceed 15 ounces per gallon of fuel. The mix or
blend of the three ingredients is critical. At least 1 ounce of ingredient A must be used for every
ounce of ingredient B. The amount of ingredient C must be greater than one-half the amount of
ingredient A. If the costs per ounce for ingredients A, B, and C are $0.10, $0.03, $0.09,
respectively, find the minimum cost mixture of A, B, and C for each gallon of airplane fuel.

ALGEBRAIC FORMULATION

Let: x1  amount of ingredient A

x2  amount of ingredient B
x3  amount of ingredient C

O.F.:
Min 0.10 x1 + 0.03 x2 + 0.09 x3 (cost)

S.T.:

x1 + x2 + x3  10 (additive > 10 oz.)

x1 + x2 + x3  15 (additive < 15 oz.)
x1  x2 (A  B)
(or x1 - x2  0)
x3  ½ x1 (C  ½ A)
(or ½ x1 + x3  0)
x1 , x2, x3 0 (non-negativity)
6. G. Kunz and Sons, Inc., manufactures two products used in the heavy equipment industry.
Both products require manufacturing operations in two departments. The following are the
production time (in ours) and profit contribution figures for the two products.

Labor Hours
Product Profit per Unit Dept. A Dept. B
1 $25 6 12
2 $20 8 10

For the coming production period, Kunz has available a total of 900 hours of labor that can be
allocated to either of the two departments. Find the production plan and labor allocation (hours
assigned in each department) that will maximize the total contribution to profit.

ALGEBRAIC FORMULATION
Let: x1  units of product 1
x2  units of product 2
b1  labor hours Dept. A
b2  labor hours Dept. B

O.F.:
Max 25 x1 + 20 x2 (profit)

S.T.:

6 x1 + 8x2 - b1 =0 (labor hours product 1)

12 x1 + 10x2 - b2 =0 (labor hours product 2)
b1 + b2  900 (available labor)
x1 , x2, b1, b2 0 (non-negativity)
7. Lurix Electronics manufactures two products that can be produced on two different production
lines. Both products have their lowest production costs when produced on the more modern of the
two production lines. However, the modern production line does not have the capacity to handle
the total production. As a result, some production will have to be routed to the older production
line. The following data show total production requirements, production line capacities, and
production costs.

Production Cost/Unit
Product Modern Line Old Line Minimum Production Requirements
1 $3.00 $5.00 500 units
2 $2.50 $4.00 700 units
Production line capacities 800 600

Formulate a linear programming model that can be used to make the production routing decision.
What is the recommended decision and the total cost?

ALGEBRAIC FORMULATION
Let: x11  units of product 1 produced on Line 1
x12  units of product 1 produced on Line 2
x21  units of product 2 produced on Line 1
x22  units of product 2 produced on Line 2

O.F.:
Min 3.00 x11 + 5.00 x12 + 2.50 x21 + 4.00 x22 (cost)

S.T.:
x11 + x12 +  500 (product 1 Min.)
x21 + x22  700 (product 2 Min.)
x11 + x21  800 (line capacity modern)
x12 + x22  600 (line capacity old)
x11 , x12, x21, x22 0 (non-negativity)
8. Edwards Manufacturing Company purchases two component parts from three different
suppliers. The suppliers have limited capacity, and no one supplier can meet all the company’s
needs. In addition, the suppliers charge different prices for the components. Component price date
(in price per unit) are as follows:

Supplier
Component 1 2 3
1 $12 $13 $14
2 $10 $11 $10

Each supplier has a limited capacity in terms of the total number of components it can supply.
However, as long as Edwards provides sufficient advance orders, each supplier can devote its
capacity to component 1, component 2, or any combination of the two components, if the total
number of units ordered is within its capacity. Supplier capacities are as follows.

Supplier 1 2 3
Capacity 600 1000 800

If the Edwards production plan for the next period includes 1000 units of component 1 and 800
units of component 2, what purchases do you recommend? That is, how many units of each
component should be ordered from each supplier?

ALGEBRAIC FORMULATIONS

Let: xij  units of component i purchased from supplier j; i =1, 2; j =1, 2, 3

O.F.:
Min 12 x11 + 13 x12 + 14 x13 + 10 x21 + 11 x22 + 10 x23 (cost)

S.T.:
x11 + x12 + x13 = 1000 (component 1 rec.)
x21 + x22 + x23 = 800 (component 2 rec.)
x11 + x21  600 (supplier 1 limit)
x12 + x22  1000 (supplier 2 limit)
x13 + x23  800 (supplier 3 limit)
x11 , x12, x13, x21 , x22, x23 0 (non-negativity)